How Does Digital Inclusive Finance Affect Households’ Over-indebtedness?

According to the data of the "China Monetary Policy Implementation Report(Fourth Quarter of 2020)",the leverage ratio of Chinese households has jumped from18% in 2008 to 59.7% in the first half of 2020.Although the debt leverage of Chinese residents is generally controllable,the risk of excessive debt in local areas or groups cannot be ignored.Inclusive finance can break through the limitations of time and space to deliver financial products and services to long-tail customers.Therefore,using the data from the China Household Finance Survey(2013,2015,and 2017)and the Peking University Digital Inclusive Financial Index(2012,2014,and 2016),this article empirically analyzes the impact of the development of digital inclusive finance on household over-indebtedness from both subjective and objective levels.The empirical study of the two-stage regression model after the two-way fixed effect model and the introduction of the instrumental variable found that the development of digital inclusive finance can significantly reduce the possibility of household over-indebtedness.Improving household consumption smoothing ability,increasing the availability of formal credit and reducing the availability of informal credit are effective ways for digital inclusive finance to reduce excessive household debt.Heterogeneity analysis shows that the development of digital inclusive finance has a more profound impact on reducing the risk of over-indebtedness of households in rural,central and western regions,with lower education,having only one house or lowincome.In terms of robustness analysis,the empirical results of this article are supplemented by methods such as changing the objective excessive debt indicators,distinguishing operating,housing,education,medical and other debts for debt heterogeneity testing.Compared with the existing research,the main innovations of this paper are the following four points: Firstly,it combines the subjective and objective micro-perspectives;Secondly,it broadens the classification thinking of existing heterogeneity analysis,taking into account the characteristics of household registration,region and household head;Thirdly,in the mechanism analysis,it makes up for the lack of literature on the relationship between the development of digital inclusive finance and household consumption smoothing ability;Fourthly,endogenous analysis runs through the research content of the whole paper,which enhances the reliability of empirical conclusions.In addition,this study makes up for the lack of literature on the relationship between digital inclusive finance and household over-indebtedness,helps to understand the characteristics of household over-indebtedness in the context of digital economy,and provides some enlightenment for preventing financial risks.